Mr. POE of Texas. Mr. Speaker, at a time when businesses in this country are navigating through waves of distress, the administration wants to deliver a tsunami in the form of tax increases. Taxing, taxing, taxing is about the only solution that it can come up with. But what it doesn't seem to realize is how it's failed all of us. It's shrinking the economy even more and is shrinking paychecks too. If the administration lets the Bush era tax cuts expire, 700,000 jobs will be destroyed. And out of those jobs, 56,800 will be in Texas.
The administration has had its chances to restore financial stability in this country without creating tax hikes. These tax increases not only target the wealthy. These taxes will actually take hard strikes at small businesses and the middle class. Contrary to what the administration believes, this is not fair.
Ernst & Young's latest study breaks it down just right. It examined the long-term impacts of increasing top tax rates. And let me tell you, they're not good. The long-run economic consequences are severe. Here it goes.
The administration proposes a one-year extension of the current tax rates for households making $250,000 or less. Then, those making $250,000 or more, including a lot of small businesses that file under the individual rate, will pay the tax rates prior to the Bush era. That means the top rate will go from 35 percent to 39.6 percent. Tax rates for the other top income tax bracket will go from 33 percent to 36 percent.
But this isn't all of them. The administration continues to tax. Medicare tax will go from 2.9 percent to 3.8 percent. A new 3.8 percent tax will be implemented on investment income. And last but not least, higher taxes on capital gains and dividends.
So, what does this total and how does it all play out? The combination of all these taxes will take the top individual income tax rate from 35 percent to 44.7 percent next year. And beware; this doesn't include all of the Obamacare taxes that will empty your wallet in 2013.
What does this do? Approximately 2 million businesses will be affected by these tax hikes. This will take capital out of the hands of business owners and reduced labor supply and the United States will lose $200 billion in economic output. And extending the rates for families earning less than $250,000 will cost us $175 billion dollars next year. As bad as this sounds already, the tax hikes will likely force American employers to trim their workers' pay by 1.8 percent.
What will happen? Business firms will be hit hard. We will see patterns of less hiring, less investment in businesses, and retarded growth of these businesses in their sector. Sixty million Americans are small business employees. About two out of three jobs was created by a small business. And the administration is trying to take this away from us.
We've had enough of their fun with taxes. As someone who claims his focus to be ``rebuilding the economy,'' he is doing quite the opposite. Our lives now revolve around taxes and this is all thanks to our nation's leader who thinks he can tax our way into economic prosperity. It doesn't take a math genius to figure out that these tax numbers are not the solution to a damaged economy. His idea that taxing the wealthy won't hurt this economy is false. If his job is to stifle job creation, create class warfare, and even further damage our market, then he's really done it well.
We can't afford to let this happen.
We can't afford to lose more than 700,000 jobs.
We can't afford to give more control to our government.
And that's just the way it is.